Google's $2.7B Fine Could Be Only the Start as EU Probes AdSense and Android

Published on July 05, 2017.

Credit: Bloomberg News

Google could see more fines from European Union antitrust regulators this year as probes into its AdSense advertising service and Android mobile-phone software near completion end, three people familiar with the cases said just a week after the company was hit with a record penalty for its shopping-search services.

Both are at advanced stages, though the Android case may not be concluded until later this year, according to one of the people, who all spoke on condition of anonymity.

Alphabet Inc.'s Google is the EU's highest-profile antitrust target, with probes on three fronts occupying regulators for as long as seven years. EU Competition Commissioner Margrethe Vestager has called 2017 her "G year" during which she would seek to nail decisions against the search-engine giant. European politicians have urged the EU to sanction Google or even break it up while U.S. critics claim regulators are unfairly targeting successful American firms.

Reuters reported earlier that regulators are seeking expert advice in the Android investigation to check their case, a sign that they may be trying to test possible flaws in the case before moving toward a final decision.

The European Commission and Google both declined to comment.

High stakes
Vestager has set high stakes for Google to comply with an EU order accompanying last month's 2.4 billion-euro ($2.7 billion) penalty. She's warned of additional fines if it won't stop systematically favoring its own price-comparison-shopping service in its general search results. Google has until late August to make changes that satisfy the EU. She's also threatened further probes on travel or map services.

Google has strongly criticized the Android case, saying the EU is putting at risk its strategy of giving away mobile-phone software -- which lowers costs for customers. The company says the strict conditions it sets on apps ensure that Android phones and software work smoothly together. The EU said last year that Google's restrictive contracts unfairly require phone makers to install Google apps. Regulators also raised concerns about how telecom operators are paid to put Google search on devices.

The company was also accused last year of hindering competition for online ads over its AdSense for Search Product. The EU criticized restrictions in contracts for placing ads on websites including retailers, telecommunications operators and newspapers. The company prevented customers from accepting rival search ads from 2006 and maintained restrictions on how competitors' ads were displayed when it altered contracts in 2009.

Fines aren't inevitable. Companies can placate regulators by offering changes that resolve antitrust issues. Google attempted to strike such a settlement for the shopping search case in 2012 but ran into opposition from rivals who protested at paying to appear in Google's promoted shopping ads at the top of the search screen.